Questions and Answers - June 17

Government—Policies 1.
Dr RUSSEL NORMAN (Co-Leader - Green) to the
Prime Minister: Does he stand by all his
Government’s policies?

Hon BILL ENGLISH (Acting
Prime Minister): Yes, particularly those that are
supporting a stronger economy and better communities.

Dr Russel Norman: With regard to the
Government’s emissions trading scheme policy, does he
agree with OECD Secretary-General Angel Gurría that it is
easier to deal with carbon emissions via a tax than an
emissions trading scheme, and that a fiscally neutral tax
like the Green Party’s climate tax cut is “a more
business friendly, labour friendly, and a greener friendly
tax structure” than an emissions trading scheme; if not,
why not?

Hon BILL ENGLISH: No. New
Zealand remains the only country outside the European Union
with a comprehensive emissions trading system. I know the
Greens believe that the price should be higher, because it
wants to punish businesses and households for using any
fossil fuels, but the fact that the price is low indicates
that demand for carbon credits is low because carbon
emissions are lower than people expected them to be. And
that is good news, not a problem.

Dr Russel
Norman: What is his response to the editorial in
the Dominion Post on 5 June, describing the Green Party’s
climate tax cut as “a systematic and intelligent attempt
to deal with climate change” and the Government’s
response to it as “lazy and arrogant”?

Hon
BILL ENGLISH: I do not think I read that editorial.
I was probably reading the Southland Times editorial. But in
this case—[Interruption]

Mr SPEAKER:
Order!

Hon BILL ENGLISH: The Greens did
make an intelligent and insightful contribution to setting
up the emissions trading scheme. At that time, they believed
that a pricing mechanism was the best way to alter
behaviour—a pricing mechanism that was flexible, according
to supply and demand for carbon credits. I am not quite sure
why they have changed their point of view. Certainly, the
Government has not been arrogant or dismissive about the
emissions trading system. We have been a bit dismissive of
the Greens’ policy, which is intended to shut down
business, destroy jobs, and make households poorer.

Dr Russel Norman: What is his response
to business commentator Pattrick Smellie’s description of
the Green Party’s climate tax cut as “a good idea” and
the Government’s response to it as “mildly
hysterical”?

Hon BILL ENGLISH: I do
not think either the Dominion Post editorial writers or
Pattrick Smellie have thought it through, quite frankly. The
Greens were part of the original debate about whether to
have a carbon tax or an emissions trading system. They were
part of a Government that decided on the emissions trading
system, and, frankly, we think they made the right choice.
The

emissions trading system is the most efficient way
of reducing carbon emissions, and that is why we have stuck
to it and we do not agree with the Greens’ policy.

Dr Russel Norman: What is his response
to comments by business commentator Bernard Hickey that
“the ETS has been a failure” and the Green Party’s
climate tax cut would be a more efficient solution?

Hon BILL ENGLISH: He is wrong about
efficiency, but a number of commentators simply believe that
too much carbon is being emitted and they want to deliver as
much punishment as possible to those who deliver it. So why
limit the carbon price to $25? You could get to a zero
carbon economy if you made it $500 a tonne; people would
stop using it straight away. So I expect the Greens to
follow the logic of their argument. If they are really
concerned about climate change, they would set that price
much higher than they have.

Dr Russel
Norman: Why do the Government and the Minister
prefer an emissions trading scheme where consumers just face
increased costs, rather than a climate tax cut, which is
fiscally neutral, where the charge on carbon is returned to
households and companies through tax cuts—so under a
climate tax cut, income tax is reduced and company taxes are
reduced to account for the fact that households and
businesses face those costs?

Hon BILL
ENGLISH: I would acknowledge that the Greens did in
their policy follow some sound logic when they said they
would reduce income taxes, because up until now they have
been strong advocates of increasing income taxes regardless
of merit, just on a point of principle. The Government
favours an emissions trading system because it is a market
pricing mechanism that incentivises everyone
participating—from consumers to emitters to Governments,
including the fact that it was consistent with the
international regimes that were being put in place at the
time. So we agree with the original logic that the Greens
applied in supporting and developing the emissions trading
system, and we have not seen persuasive arguments to change
to a carbon tax—and particularly not to a punitive carbon
tax, where the tax is higher than it needs to be, given
emissions around the world, and it would punish households.

Dr Russel Norman: What is his response
to the economist John Small’s assessment that the Green
Party’s climate tax cut “would stimulate innovation in
New Zealand”, while the risk of doing nothing, as is the
case under the failed emissions trading scheme, is that
“valued trading partners might one day stop buying from us
because they don’t like our production methods”? What is
his response to the economist John Small’s comments?

Hon BILL ENGLISH: He makes the same
mistake as the Greens. I mean, the emissions trading system
was set up to reflect the world carbon price. At one stage,
we thought it would be $25 or $30. Because of recession and
other changes in how industries work in different parts of
the world, we have ended up with a large supply of credits
and, therefore, a lower price on carbon. That reflects the
fact that there are fewer carbon emissions than people
thought there were. The Greens are picking a random number
as a tax, which will punish households and businesses, and
actually puts too high a price on reducing carbon
emissions—higher than it needs to be.

Economic
Growth—Household Savings 2. Hon DAVID
CUNLIFFE (Leader of the Opposition) to the
Prime Minister: Does he stand by his
statement relating to an increased level of household saving
that it “is a necessary foundation for more sustainable
growth in the medium and longer terms”?

Hon
BILL ENGLISH (Acting Prime Minister): Yes, which is
why the Government welcomes the recent improvements in
household savings. For example, in the 5 years to 2008,
household savings averaged minus 4.5 percent, and they
slumped to minus 7.6 percent in 2003—the worst on record
in the history of that series. Under the current Government,
household saving has average minus 0.2 percent. Higher
household saving and improvement in the Government’s books
has helped reduce the current account deficit to 3.4 percent
of GDP—a significant improvement on the current account
deficit when Labour left office of 7.9 percent.

Hon David Cunliffe: Since the Prime
Minister is so keen on past Governments, does he agree that
it was a mistake for National to abolish the compulsory
savings scheme in 1975—

Hon Member:
How old were you?

Hon David Cunliffe:
Well, how long is a piece of string? [Interruption]

Mr SPEAKER: Order! The member has a
right to ask the question, and I will judge the Government
responsibility.

Hon David Cunliffe:
—given that the Financial Services Council has estimated
that New Zealand has now foregone $278 billion in savings as
a result of that short-sighted National Government decision?

Hon BILL ENGLISH: If we are talking
about mistakes of the 1970s, one that Labour made was to
make Bill Rowling the leader of the Labour Party—and that
member will be finding out what he felt like. No, I disagree
with the Financial Services Council. I think its
calculations are nonsense, and we also disagree with
Labour’s policy of making KiwiSaver compulsory, because it
will have to explain to hundreds of thousands of low-income
New Zealanders—

Mr SPEAKER: Order!
That was not the question that was asked.

Hon
David Cunliffe: Is he aware that after 25 years of
compulsory savings Australia has built up a savings nest egg
of no less than $1.3 trillion, and why does he not think
Kiwis should have a similar pool of capital for investment
and their futures?

Hon BILL ENGLISH:
Because the member is using a very partial measure of the
Australian economy. Economists all agree that the best
measure of our savings/ investment imbalance is the current
account deficit. Since the Australians brought in their
compulsory superannuation scheme New Zealand has, on
average, had a smaller current account deficit than the rest
of the world—that is, a smaller deficit on domestic
savings to fund its investment. There is nothing magic about
the Australian compulsory superannuation scheme. In another
measure, New Zealanders have more money invested in
businesses, but they do have less in the products sold by
the Financial Services Council.

Hon David
Cunliffe: Speaking of the current account deficit,
does the Prime Minister accept that Australia’s large
compulsory savings pool has enabled it to own its own banks
and nearly all of ours?

Mr SPEAKER: The
Hon Bill English, insofar as there is ministerial
responsibility.

Hon BILL ENGLISH: There
is no doubt that it has meant that its stock market is a
bigger proportion of its economy. As it happens, in New
Zealand, family and cooperative businesses are a much bigger
proportion of our economy, and we think that is a quite
legitimate form of savings and investment. In any case,
Labour will spend the next 3 months promising carve-outs
from its compulsory scheme, which will compel hundreds and
thousands of the poorest New Zealanders to give up 9 percent
of their income when they cannot afford to give up any.

Hon David Cunliffe: Given that the Prime
Minister is so concerned about the current account deficit
and given that 85 percent of New Zealand’s national debt
is private debt, why is he not prepared to support a policy
that will grow private savings, shrink private debt, and
reduce the current account deficit?

Hon BILL
ENGLISH: Because it will not do any of those
things—that is why. There are already 2.3 million New
Zealanders in KiwiSaver. The member should take some of the
credit for the success of KiwiSaver, because his Government
introduced it, and people are still joining it at the rate
of 15,000 per month. The people who are not in KiwiSaver
generally cannot afford to be in it. I invite the Labour
Party to explain to hundreds of thousands of low-income New
Zealanders why it is effectively going to take 9 percent of
their income off them when they are living from week to week
on very small margins.

Hon David
Cunliffe: Given that the Prime Minister’s party
opposed KiwiSaver when Labour introduced it, and now
supports it, and given the crocodile tears the Acting Prime
Minister has just cried about low-income New Zealanders,
will the Minister of Finance and the Prime Minister both

stand up and agree with us that the minimum wage should
be raised as soon as possible to $15 an hour, and if he does
not, would he like to explain to New Zealanders why he wants
to keep their wages down and their savings down, and their
banks owned—

Mr SPEAKER: Order! This
is question time, not the general debate.

Hon
BILL ENGLISH: No, and the member is trying to tell
people that low-income New Zealanders who will be hit by a 9
percent cut in their income will not worry about it because
they can get a small percentage increase in the minimum
wage. Actually, most of them are not on the minimum wage.
They have low incomes because they are seasonal workers,
casual workers, or not working at all. The member will spend
the next 3 months backtracking from his position of
compulsory KiwiSaver—you just watch.

Economy—Outlook 3. Hon KATE
WILKINSON (National - Waimakariri) to the
Minister of Finance: What recent reports
has he received about the outlook for the New Zealand
economy?

Hon BILL ENGLISH (Minister of
Finance): The Reserve Bank last week issued its
Monetary Policy Statement for June. It forecast that the
economy will expand by around 4 percent in the year to June
2014, with growth increasingly broad-based and increasingly
self-sustaining. It also forecast that inflation is expected
to remain near the mid-point of its 1 to 3 percent target.
However, inflationary pressures are expected to increase. It
notes that, despite recent falls in dairy prices, export
prices remain high by historical standards. These factors,
together with an extended period of relatively low interest
rates, are supporting what the Reserve Bank calls robust
growth in incomes and in demand.

Hon Kate
Wilkinson: In releasing its latest forecasts, what
key assumptions did the Reserve Bank make about the economy
over the next few years?

Hon BILL
ENGLISH: The Reserve Bank says its outlook for the
next few years depends on several key assumptions. It says
prices for New Zealand’s exports are expected to fall
further from current levels, before they stabilise at levels
that will remain high by historical standards; the
trade-weighted exchange rate is expected to fall gradually
over the next 3 years; annual net migration is assumed to
peak at the end of 2014, before easing at a similar rate to
the last migration cycle in the early 2000s; and annual
house price inflation is projected to ease from its peak of
over 10 percent late last year, to under 1 percent within
the next 4 years.

Hon Kate Wilkinson:
What reports has the Minister received about the
Government’s financial position as it moves to return its
books to surplus next year, in line with its wider economic
programme?

Hon BILL ENGLISH: Treasury
last week released the Government’s financial statements
for the 10 months to 30 April. They showed that the
operating deficit was $1.37 billion for the 10
months—about $148 million smaller than forecast in the
Budget. Core Crown revenue was $12 million below forecast,
while core Crown spending was $90 million below forecast.
The results confirm that the economy is on track to meet
Treasury’s forecasts, which include a modest Budget
surplus in this next financial year.

Hon Kate
Wilkinson: In setting a track back to fiscal
surplus next year, how has the Government ensured the income
tax and income support systems are fair and continue to help
those households most in need?

Hon BILL
ENGLISH: A combination of decisions over the income
tax and support systems provides significant income
redistribution from higher-income households to lower-income
households. Latest estimates show that households earning
over $150,000—that is, the top 15 percent of households by
income—will pay 49 percent of income tax in this year. But
when benefit payments, Working for Families, paid parental
leave, and accommodation support are taken into account,
these 15 percent of households will pay 74 percent of net
income tax, and that is excluding New Zealand
superannuation. Households under $60,000 a year, which is
just under half of all

households, are expected to pay
9 percent of income tax, but when we take into account their
income support payments, they pay no net income tax at all.
The $2.5 billion of income tax expected to be paid by
households earning under $60,000 a year will be more than
offset by the $7.3 billion they will receive in income
support.

Immigration—Policy 4.
Rt Hon WINSTON PETERS (NZ First) to the
Minister of Immigration: Is he satisfied
with the current immigration policy settings?

Hon
MICHAEL WOODHOUSE (Minister of Immigration):
Generally yes, but I am constantly working to refine policy
to ensure New Zealand is at the front of that global contest
for skills and investment, tourists, and international
students.

Rt Hon Winston Peters: Well,
if that is so, is it fair on all other migrants that one
country, China, is grossly overrepresented in the number of
parent category migrants?

Hon MICHAEL
WOODHOUSE: Well, I do not accept that they are, but
I will go through with the member what I have already said
in question time about the time lag between the bringing in
of permanent residents and the subsequent applications for
parent category visas for their parents. Chinese skilled
migrants were rather more prominent under the previous
Government, which was supported by that member’s party,
and we are now seeing some coming in, but I note also that
this Government has removed the centre of gravity provisions
that would have made Chinese parents more likely to gain
residence under that category. It is a much fairer system.

Rt Hon Winston Peters: I seek leave to
table two sets of graphs compiled by the Parliamentary
Library. One is to do with the year ended May 2014, and one
is to do with the parent category pending, for which
applications are being processed. Both are from the
Parliamentary Library.

Mr SPEAKER: Leave
is sought to table those particular graphs, prepared for the
member by the Parliamentary Library. Is there any objection
to them being tabled? They can be. ocsPETERS, Rt Hon
WINSTONDocuments, by leave, laid on the Table of the House.

Rt Hon Winston Peters: Of the people
granted residence in New Zealand as at the end of May 2014,
why is one country, China, so overrepresented in the parent
category, and what is the Government doing about it?

Hon MICHAEL WOODHOUSE: I am sure I
explained the reasons for that in my previous answer, and I
have nothing to add to it.

Rt Hon Winston
Peters: If that was an explanation we should all
believe, why is it that the parent applications on hand
category show that one country, China, has more applications
than all other countries put together?

Hon
MICHAEL WOODHOUSE: That may very well be the
case—I have not seen the data—but what is of interest to
me is not the applications but the acceptances.

Rt Hon Winston Peters: Why is the
Minister and his Government encouraging one country to use
New Zealand as a retirement home with all the benefits and
superannuation and health care and infrastructural
investment that New Zealanders work—[Interruption] Mr
Speaker, can I possibly hear myself—

Mr
SPEAKER: I can hear you quite—[Interruption]
Order!

Rt Hon Winston Peters: They’re
all shouting at me here.

Mr SPEAKER:
Order! The member will resume his seat. The member has a
right to have his question heard. I was actually having no
trouble hearing it because of the loud way in which the
member was delivering his question. If he could bring his
question to a conclusion rather than a statement, I would be
very grateful.

Rt Hon Winston Peters:
Thank you very much, Mr Speaker, for your help. It is always
appreciated. Why is the Minister and the Government
encouraging one country to use New Zealand

as a
retirement home with all the benefits that most New
Zealanders work 40 or more years for and pay for in their
taxes?

Hon MICHAEL WOODHOUSE: I reject
the premise that one country is being favoured over another.
I note that since that member’s party supported the
previous Government, the parent category approvals have
dropped, the centre of gravity provisions have been removed,
the sponsorship requirements have been increased, the family
income thresholds have been increased, and I have a bill in
the House that would extend the sponsorship period from 5
years to 10 years, and that member’s party is not
supporting it. So if he is serious about this, he would
support the Immigration Amendment Bill.

Budget
2014—Cost of Canterbury Recovery 5. Hon
DAVID PARKER (Deputy Leader - Labour) to the
Minister of Finance: Does he stand by the
Cost to the Crown of the Canterbury Rebuild presented in
Budget 2014?

Hon BILL ENGLISH (Minister of
Finance): Yes. That is Treasury’s best estimate,
based on current information and according to the criteria
it has to apply for the accuracy of the estimates.

Hon David Parker: Does he agree with the
Prime Minister’s statement last week that the cost to the
Crown of the rebuild will increase to around $20 billion?

Hon BILL ENGLISH: I think the Prime
Minister suggested that it could. Of course, that is yet to
be seen, but the best estimate at the moment is around $15.4
billion. There has been some airing of differences of view,
for instance, around how much of the cost councils should
carry compared with the Government, and we are engaged in
constructive discussions about that. That could possibly see
the costs rise.

Hon David Parker: Given
that even before the Budget the Christchurch City Council
said its share of infrastructure rebuild costs was higher
and the Prime Minister has lately said that he thinks the
costs are going up too, why did the Minister present a
Budget showing the Crown’s share of those infrastructure
rebuild costs had dropped compared with the prior Budget?

Hon BILL ENGLISH: Because that is, and,
I have to say, remains the best assessment of the cost of
the infrastructure. The council has been becoming much more
familiar with its current financial circumstances and its
outlook. It has some views about what costs it should carry
and those, of course, will be constructively discussed with
the Government. But, in the end, Treasury sets the amount
according to the valuations of the insurance liabilities and
the best estimates of future costs to the Government.

Hon David Parker: Why would anyone have
confidence in his numbers, when at the last election the
Pre-election Economic and Fiscal Update booked the proceeds
of asset sales but failed to account for the decrease in
dividends?

Hon BILL ENGLISH: As was
extensively discussed after the last election, as part of
Labour’s usual relitigation of election results where it
thinks the public got it wrong, including back in 1975,
which it is still relitigating—as part of that discussion
it became quite clear that Treasury followed the correct
statutory processes, as it has for this Budget.

Hon David Parker: Can he assure the
House that the rebuild figures published by Treasury in this
year’s Pre-election Economic and Fiscal Update will be
accurate and will fully represent the true and higher costs
of the rebuild, as belatedly acknowledged by the Prime
Minister just last week?

Hon BILL
ENGLISH: As the member will know, the Pre-election
Economic and Fiscal Update is prepared by Treasury in its
capacity, under the Public Finance Act, as an independent
statutory agency. It will decide what those numbers are, and
I expect it will apply the same objectivity and integrity it
has to the Budget 2014 number. It could be higher. That is
up to Treasury. It depends on a lot of moving parts in
respect of Christchurch funding.

Transport—Funding 6. DAVID
BENNETT (National - Hamilton East) to the
Minister of Transport: What recent
announcements has he made on funding for transport?

Hon GERRY BROWNLEE (Minister of
Transport): Last week I released the
draftGovernment Policy Statement on Land Transport 2015/16 -
2024/25. This is a very thorough document, which proposes
investing $38.7 billion in land transport over the next 10
years. It continues the Government’s prioritisation of
economic growth and productivity, road safety, and value for
money. It continues to focus on fixing the infrastructure
deficit, which this Government has set about rectifying.

David Bennett: What specific gains are
there for regions in the Government policy statement?

Hon GERRY BROWNLEE: Our regional
networks are of critical importance to New Zealand’s
economy, and the draft Government policy statement
recognises this by increasing the funding to maintain local
roads and replacing regional funding, which was scheduled to
expire on 31 March 2015. It is replaced with a dedicated
activity class for regional improvements of up to $90
million a year, and that funding package, although
contestable, is available for both local and State highway
projects. There is also an exclusion on it for metropolitan
councils.

Denis O'Rourke: Why is the
Government preventing funding to restore the Napier-Gisborne
rail link, when the road route cannot be expected to cope in
the long term?

Hon GERRY BROWNLEE: No,
we are not.

Denis O'Rourke: I raise a
point of order, Mr Speaker. [Interruption]

Mr
SPEAKER: Order! This is a point of order.

Denis O'Rourke: The Minister seems to
have misunderstood the question. He said he was not, and
that was not the question. The question asked why the
Government is preventing funding.

Mr
SPEAKER: Order! That was the question, and the
Minister responded by saying it was not preventing funding.
That is the Minister’s answer.

David
Bennett: What other areas of land transport are
receiving a boost in funding?

Hon GERRY
BROWNLEE: The draft Government policy statement
also proposes increases in funding for a range of
activities, including walking and cycling, road safety
promotion, and road policing. It continues increasing
funding for public transport, as set out in the current
Government policy statement. Not all of the Government’s
commitments to these activities are included in the
Government policy statement. For example, the bulk of the
$1.3 billion spent on Auckland rail was funded outside the
Government policy statement. Walking and cycling also
received money outside of this activity class—for example,
funding the cycleway alongside the Christchurch road of
national significance, the Christchurch Southern Motorway,
which is part of the State highway budget.

Phil
Twyford: Why will he not take a more balanced
approach and move freight by whatever combination of rail,
coastal shipping, ports, and roads is the most efficient and
sustainable for any given route, instead of his approach,
which is just bigger trucks and bigger motorways?

Hon GERRY BROWNLEE: We do not support
Labour Party policy.

Family/Whānau Violence and
Child Abuse—Government Response to Report 7.
SUE MORONEY (Labour) to the
Minister for Social Development: Will she
agree to establish a cross-party taskforce to address the
rates of child abuse and domestic violence in New Zealand as
described in The People’s Report: The People’s Inquiry
into Addressing Child Abuse and Domestic Violence?

Hon PAULA BENNETT (Minister for Social
Development): No, we are 95 days out from a general
election, and setting up a cross-party task force now would
simply be all about politics.

Sue
Moroney: Talking about playing politics, then, does
she recall that Labour, when in Government, did set up a
multi-party working group on family violence, and every
party participated except the National Party, which withdrew
from the group in September 2006 and were

invited to
re-join in August 2007 but declined—and that was quite
some time before an election, Minister?

Hon PAULA
BENNETT: And what a waste of time that was; it did
nothing. So, effectively, your little cross-party task force
did nothing to actually better the lives of the people who
are living with domestic violence. You have proved your
point—that your cross-party task force was ineffective and
inefficient.

Sue Moroney: Why did it
take an individual businessman to initiate a report into our
horrific rates of child abuse and domestic violence rather
than the National Government stepping up and taking some
responsibility?

Hon PAULA BENNETT:
Actually, this Government has done many reports, many
reviews. I can point to the Children’s Action Plan as the
first one, when we did a white paper—actually, there were
10,000 submissions to that. We travelled up and down the
country making sure that we got people to actually address
it. The fact that Sir Owen Glenn has chosen to do this is
actually a good thing, if that is what he wants to do. We
take it seriously, we are interested in the outcomes of it,
and we will go forward from there.

Sue
Moroney: Can the Minister still claim that
addressing domestic violence is a priority—[Interruption]

Mr SPEAKER: Order! I am having trouble
hearing the question. I invite the member to start again.

Sue Moroney: Can the Minister still
claim that addressing domestic violence is a priority when
under National the Task Force for Action on Sexual Violence
was shelved, the advocates for children and young people who
witness family violence were scrapped, the Te Rito
Collaborative Community Family Violence Prevention Fund was
canned, and the family violence education services were
disestablished?

Hon PAULA BENNETT: And
is this not the difference? That is all about the adults who
pontificate to each other, talk about what they want to do.
None of it is about what is actually happening in a house
and the services that need to really happen. So it is all
about the next task force, the next report, the next kind of
talking to each other that Labour would have us do, when it
is actually about services on the ground that are able to
address it. I point to Whānau Ora. I point to the
Children’s Action Plan. I point to the work on drug and
alcohol abuse that is going through the health and justice
systems. Those are the things that will make a difference.

Carol Beaumont: What action will she
take to ensure women’s refuges can meet the increasing
demand from victims of domestic violence, given that they
are struggling to respond in the face of real cuts in
baseline funding?

Hon PAULA BENNETT:
Women’s Refuge have millions more dollars a year now than
it did under Labour. [Interruption]

Mr
SPEAKER: Order! Question No.
8—[Interruption]—Order!

Hon PAULA
BENNETT: Is that it?

Mr
SPEAKER: Yes, that is the end of that question.

Child Poverty—Response to Recommendations
8. JAN LOGIE (Green) to the
Minister for Social Development: Will she
support a Child Poverty Act that sets out targets and
measures for eliminating child poverty as recommended by the
Tick4kids campaign; if not, why not?

Hon PAULA
BENNETT (Minister for Social Development): No. We
already measure poverty in a variety of different ways that
are all published in the Ministry of Social Development’s
household incomes report. We are focused on getting on with
things that will make a difference.

Jan
Logie: I raise a point of order, Mr Speaker. I am
not sure whether the Minister heard my question.

Mr SPEAKER: Order! I heard the question. I
am sure that the Minister heard the question because it has
been addressed, but the member does have supplementary
questions.

Jan Logie: Does she think her
policies warrant a “tick 4 kids” for September when she
will not commit to ending child poverty?

Hon
PAULA BENNETT: Well, that is simply not true. We
are getting on with warming up homes, we are getting on with
immunising kids, we are getting on with putting more money
into preventing rheumatic fever, and we are getting on with
making sure that those children are no longer living in
welfare-dependent homes. We have got the Children’s Action
Plan, which fundamentally makes a difference. Those are the
things that actually need to be done and that we are doing.

Jan Logie: How can she think her
policies warrant a “tick 4 kids” when the College of
Public Health Medicine says her Government’s investment in
children is barely half the OECD average and is
“insufficient to reduce the impact of poverty on their
health and well-being.”

Hon PAULA
BENNETT: I would say that for those who are the
most vulnerable we have one of the most generous welfare
systems in the world. Last year alone we gave out $262
million just in hardship grants, let alone what is going to
welfare and support for those who need it. So I disagree
with those figures, but I suppose if the member wants to
give me all of the research behind them I can have a look.

Jan Logie: How do her policies warrant a
“tick 4 kids” when one baby on average dies each week in
this country from an illness linked to poverty and yet she
refuses to restore real benefits to the level they were
before they were cut 23 years ago?

Hon PAULA
BENNETT: I think the member is making a correlation
there that I am not sure absolutely fits. I think we have
one of the most generous welfare systems in the world. I
have not seen the research behind the figure of 60 children
a year. I am not sure exactly where that has come from. What
I do support, though, looking at the Tick4kids campaign, is
where it says it wants political parties to prioritise
children’s access to quality health, housing, education,
and welfare to ensure every child has what they need to live
a safe, happy, and fulfilled life. I would argue that so
does this side of the House, most definitely. That is what
we are putting our resources in. As we had a bit more money
we put an extra $500 million into those vulnerable children
and families just in this past Budget alone.

Business Growth Agenda—Future Direction 2014
Report 9. MARK MITCHELL (National -
Rodney) to the Minister for Economic
Development: What announcements has he made about
the future direction of the Government’s Business Growth
Agenda?

Hon STEVEN JOYCE (Minister for Economic
Development): Last week the Minister of Finance and
I released the Business Growth Agenda Future Direction 2014
report. This report outlines the significant progress the
Government has made in creating the conditions for business
to invest for jobs and growth. More than half of the 350
Business Growth Agenda actions across the six key areas are
either complete or in the implementation phase. The results
so far have contributed to New Zealand’s business
confidence, strong growth, increasing employment, and
improved trade balance, stronger productivity growth, and
real wages rising faster than the cost of living. The
challenge for the Business Growth Agenda now is to help
reduce further the capacity constraints for the New Zealand
economy and help convert a couple of years of good growth
into sustained longer-term growth and a lift in incomes for
Kiwi families.

Mark Mitchell: What will
the Government’s Business Growth Agenda now focus on?

Hon STEVEN JOYCE: We intend to focus the
Business Growth Agenda on around 60 key initiatives that we
see as essential to further fostering business confidence
and growth. For example, in the area of innovation we have
an ambitious work programme that will continue to help the
business sector double its expenditure on research and
development to around 1 percent of GDP.

Amongst other
things we will implement changes to the tax treatment of
research and development to further increase investment. We
will support Callaghan Innovation to develop the suite of
research and development grant programmes further and
establish our new technology-focused incubators, all those
things that are—

Hon David Cunliffe:
Labour policy.

Hon STEVEN JOYCE: —not
Labour Party policy. Mr Cunliffe wishes it was Labour Party
policy, but he wishes for lots of things. Likewise in the
skills space, we have a series of initiatives to lift our
longer-run productivity growth rate, like investing in
apprenticeships and vocational skills; encouraging sole
parents into higher education; investing more in engineering
and sciences; and setting up new information and
communications technology graduate schools in Auckland,
Wellington, and Christchurch. We will lift high-quality
information and communications technology graduate numbers,
an area of critical importance to our economic future.

Mark Mitchell: What initiatives will the
Government focus on in the areas of building export markets
and developing our natural resources?

Hon STEVEN
JOYCE: In the exports area we are working to
increase our ratio of exports to GDP to 40 percent by 2025,
and we are making good progress there with the big lift in
goods exports in the year to March, and our areas of focus
towards that goal. That means we will keep negotiating, of
course, comprehensive high-quality free trade agreements,
which the Opposition is pretty ambivalent about these days.
We will boost our representation in China, ASEAN, and other
emerging markets, and capitalise on the 2013 growth package
for tourism and education. We have a large range of
initiatives to help manage and develop our natural resource
endowment. In the next few years we will focus on increasing
value from, and improving the quality of, water; improving
environmental reporting; accelerating petroleum exploration;
combatting kauri dieback; and improving the productivity of
Māori land.

Economic Growth—Impact on Workers
10. GRANT ROBERTSON (Labour - Wellington
Central) to the Minister for Economic
Development: Does he agree with the Minister of
Finance that workers “have a right to expect to see some
of the benefits” of growth in the economy?

Hon
STEVEN JOYCE (Minister for Economic Development):
Yes, and they are. The average wage has increased by $3,000
in the past 3 years to $54,700.

Grant
Robertson: No, it hasn’t.

Hon STEVEN
JOYCE: Yes, it has, and I sense an oncoming labour
cost index discussion. Based on the latest strong economic
growth forecast, the average wage is forecast by Treasury to
increase a further $7,600 to $62,300 over the next 4 years.
Wages are increasing faster than inflation. Average weekly
earnings rose 3.2 percent in the last year while the cost of
living grew 1.5 percent.

Grant
Robertson: In light of that answer, is an effective
1 percent pay increase a reasonable pay offer this year for
workers at the Ministry of Business, Innovation and
Employment, in light of his claims about wage growth?

Hon STEVEN JOYCE: Well, I thought the
member actually understood that Ministers do not get
involved in Public Service pay negotiations.

Hon
Members: Ha, ha!

Hon STEVEN
JOYCE: Well, it is an important thing, and Mr
Robertson often comes down to the House and tries to quote
the Cabinet Manual or the State Sector Act, and both of
those make it clear that Ministers are not to get involved
in pay negotiations—unless the Labour Party’s approach
is now to go back to the 1970s and to the Federation of
Labour and the Minister of Labour sitting down and doing the
general wage order.

Grant Robertson:
In light of that answer, what pay offer for Ministry of
Business, Innovation and Employment staff did he suggest, or
agree to, when he met Ministry of Business, Innovation and
Employment chief executive David Smol on the afternoon of 4
June? [Interruption]

Mr SPEAKER: Order!
A question has been asked; I want to hear the answer.

Hon STEVEN JOYCE: Well, firstly, if the
member would like to have a look at the Cabinet Manual, it
says the Minister should maintain the independence of the
chief executive’s decision-making process, and that is
what I have done in this regard. Mr Smol updates me on a
range of things from time to time. In terms of a particular
day, I have no idea, but in terms of the particular
negotiations, that is very much the chief executive’s
responsibility.

Grant Robertson: Has he
discussed with David Smol the specific details of the offer
made to Ministry of Business, Innovation and Employment
staff, including at a meeting on 4 June?

Hon
STEVEN JOYCE: I just told the member that the chief
executive has kept me updated. I cannot recall a particular
date, but I am prepared to accept there might have been a
date on 4 June. The point is that he has kept me updated. At
all times they are his decisions.

Grant
Robertson: Did he express a view to Mr Smol about
what he would consider to be an appropriate maximum offer
that should be made to Ministry of Business, Innovation and
Employment staff?

Hon STEVEN JOYCE: No,
I do not believe I did. The chief executive updated me as to
the progress of negotiations. He is making the offer and he
gets to determine it, and he consults with the State
Services Commission.

Consumer
Rights—Legislative Reform 11. JONATHAN
YOUNG (National - New Plymouth) to the
Minister of Consumer Affairs: How will
consumers benefit from the improvements to consumer law that
come into effect today?

Hon CRAIG FOSS (Minister
of Consumer Affairs): The Consumer Law Reform Bill,
which was passed last year, is a comprehensive update of New
Zealand’s consumer legislation. The changes that come into
effect today will strengthen consumer rights, simplify
business compliance, and ensure consumer protections are
clear and accessible. Consumers now have the same rights
when purchasing goods and services, regardless of whether
they buy online, in a store, by auction, over the phone, at
home, or anywhere else.

Jonathan Young:
What are some of the key changes that will benefit
consumers?

Hon CRAIG FOSS: Some of the
key changes for businesses and consumers include that
protection under the Consumer Guarantees Act will include
online businesses and auction sites such TradeMe, traders
will be liable if goods do not arrive on time or are
damaged, a 5-day cooling-off period will now apply to
uninvited direct door-to-door and telephone sales, new
disclosure rules affecting extended warranties, and a new
provision will require traders to be able to substantiate
any claims they make as opposed to the Commerce Commission
having to test that claim. These changes give more rights to
consumers and will toughen up on unscrupulous traders.

Housing, Affordable—House Prices and Rents
12. PHIL TWYFORD (Labour - Te Atatū)
to the Minister of Housing: Will
New Zealand return to its historic average levels of house
prices to incomes and house prices to rents under his
Government’s housing policies; if so, how long will it
take for this to occur?

Hon Dr NICK SMITH
(Minister of Housing): The ratio of national
household income to house price deteriorated from 4.8 to 6.3
between 2000 and 2008, but has improved under this
Government to 5.5—that is, it got 24 percent worse under
Labour and has improved by 15 percent under National. This
would suggest it would take about 12 years to reverse the
damage of the previous Government in respect of housing
affordability and to get back to 2000 levels. The reason I
have confidence that the Government’s housing policies
will improve affordability is that they are based on the
comprehensive report from the Productivity Commission, the
new house build rate has

increased from 14,000 houses
per year to 24,000 per year, and new initiatives like the
housing accords are freeing up land at the fastest rate in
decades.

Phil Twyford: Does he agree
with the Reserve Bank’s view that a rise in annual net
migration to 45,200 by mid-2015 under current policy
settings would force annual house price inflation up by 4
percentage points and force the bank to raise interest rates
by as much as a further 55 basis points, or 0.5 percent; if
so, will this make it harder or easier for Kiwi families to
get into their own home?

Hon Dr NICK
SMITH: There is some relationship between migration
and the overall demands on housing levels, and that is
reflected in the latest OECD housing data, which shows that
the most affordable houses in the world are in Greece
because everybody is leaving there. That makes it very
affordable housing. That is not quite the economic plan of
this Government, but I do understand that members opposite
are quite keen on the Greek approach.

Phil
Twyford: Has he seen new research showing that the
average New Zealand house price rose by $98 a day over the
past year and by $289 a day in parts of Auckland, with the
average price in Auckland City now $842,000, according to
Quotable Value, and what is he doing to ensure that Kiwi
first-home buyers can save at the rate of $100 a day—or
$300 a day in Auckland—with interest rates heading north
of 8 percent because of his failed housing policies?

Hon Dr NICK SMITH: The official data
shows that house prices nationally over the last year have
increased by 9 percent. I note that during the previous
Government house prices increased in a single year by 28
percent, and Labour members insisted that that was not a
problem and did absolutely nothing. In contrast, this
Government has a very wide programme of freeing up land
supply, dealing with issues of building materials costs, and
bringing bills before the House to deal with those big
increases in infrastructure costs that occurred with failed
legislation from the previous Government. That is why I have
confidence in this Government’s housing affordability
agenda.

Phil Twyford: Does the 39,000
new affordable homes he has promised Auckland include the
700 to 800 affordable homes the Auckland Council says will
actually result from his promise, and how will he make up
the shortfall between his promise and the actual number of
affordable homes needed in Auckland for people to live in?

Hon Dr NICK SMITH: I note that the
increase in the issuing of building consents in Auckland in
the last quarter is the fastest rate of increase in new
house build for 12 years. It is the fastest rate of increase
in 14 years. We now have 24,000 houses a year being built,
with a good number of those in Auckland, and that is a
direct consequence of this Government’s measures through
the Auckland Housing Accord and other measures to increase
both supply and affordability.

Phil
Twyford: Rather than blaming councils for holding
back affordability, why does he not implement a national
policy statement on affordable housing under the Resource
Management Act or split out the Government’s housing
affordability provisions in its Resource Management Act
reforms so that they can be passed before the election, or
would he rather just continue to blame other people for his
failed housing policy?

Hon Dr NICK
SMITH: I am actually encouraged by the member’s
question, because for 10 years Labour has denied there is
any connection between the Resource Management Act and
housing affordability. But the key problem is this. Labour
is saying the answer is a national policy statement on
housing affordability under the Resource Management Act. But
the advice from officials is you cannot do a national policy
statement on housing affordability unless you amend Part 2
of the Resource Management Act, which is something that
members on this side of the House want to get on and do and
members opposite have opposed at every step of the way.

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